Pam Gencarella: Something’s Rotten in the State of Denmark, er, RI

If it quacks like a duck.

Survey says - Rhode Islanders least proud of living in their home state. A big part of that is the lack of trust in their state government, tied for second-lowest in the country. Bear in mind, that poll was taken between June and December of last year. That’s before the recent, unfolding saga of the Corso/38 Studios lucrative contracts reported by Dan McGowan and Tim White from Channel 12. Although Corso was contracted for $300,000 a year to interact with government agencies and various public officials, no one registered as a lobbyist. Oops, RI’s governmental office responsible for that oversight, Secretary of State, Ralph Mollis, totally absent from the party.

Then there is the deal Corso had to be paid nearly $500 an hour to look at RI’s economic incentives that, of course, would come from the General Assembly. There’s also the contract that would provide Corso with 10% of the company’s construction budget (with a floor of $500,000) as well as the contract that would provide nearly 10% of any financing he could arrange for the company. Additionally, there’s the contract that would have allowed Michael Corso to sell tax credits secured by the company. Again, these would come from the General Assembly. It’s been reported in the past that former House Speaker Gordon Fox and Corso were quite tight.

Oh the tangled web we weave.

Oh, and there’s that secret meeting Corso had with Richard Licht, Chafee’s top aid and Director of Administration. Apparently, Licht can’t remember much about the meetings - “I can’t remember what they asked me or didn’t ask me”, - which should be of concern for Rhode Islanders, since he is seeking a judgeship. Memory would be important in that kind of position.

Seems Michael Corso had a good thing going with the 38 Studios deal and the RI government. In RI, we know that it helps to have friends in high places.

The darkest hour is just before the day dawns.

So, what does all of this unravelling mean for the RI taxpayer’s perception of integrity in it’s government? Surely, these events will not help improve that outlook. Now pile on the threats to Representatives MacBeth and Chippendale, leading members of the House Oversight Committee probing the 38 Studios debacle. Message received loud and clear. Someone does not want the dirty laundry aired, so thank you Representatives MacBeth and Chippendale for your truly heroic public service.

No wonder to behold.

Is it any wonder that Rhode Islanders have no faith in their government and the insiders with whom they do business? Imagine how the rest of the country perceives us. Even the Chicago Tribune, which presumably has a lot to write about in government mistrust (Illinois residents have the least trust in their state government, has reported on RI’s dealings with 38 Studios. Perhaps a case of misery loves company.

Do something to help RI. It takes just five minutes.

So this year, there is an opportunity for our General Assembly to help create a better perception of RI government for all of those who may be considering coming here as well as for those of us already here. The elimination of the Master Lever has received traction, but it won’t matter that the new Speaker of the House brought it to a vote, with overwhelming support, if the Senate President hangs tough and lets it languish in ‘further study land’ (even though it has been on the table for 51 years). All the cajoling of the judiciary committee members and supporters mean nothing if she is bent on keeping a good bill down. There is an organized ground swell to repeal the Master Lever with which you can hitch your wagon. Please click here to send your strong message to Senate President Teresa Paiva Weed to repeal the master lever in the Senate this year!

There is also a much needed good government bill still sitting on the back burner since the court decided in 2009 that the Ethics Commission did not have jurisdiction over legislators. The bill that would simply let voters decide if they want to restore the Ethics Commission jurisdiction has gone nowhere in both the House and the Senate this year. If you think RI needs to bolster its reputation, and a good start would be with Ethics Reform, contact the General Assembly leaders, House Speaker Mattiello and Senate President Paiva Weed and let them know what you think.

Good government doesn’t cost much.

Good government may actually help RI to recover. Consider the I 195 promise land and all of its much anticipated jolt to the RI economy. On the surface, very little interest. Perhaps the passage of these good government bills could provide the impetus for outsiders to take a risk on RI. If not, at least their passage would create the perception for Rhode Islanders that our elected officials are listening and are ready to take action that would restore our faith in government.

So, before you leave this page please utilize the contact links contained in our article to send your message to RI leadership to listen and respond to the wishes of the people of Rhode Island.

Pam Gencarella is a member of OSTPA, a taxpayer advocacy organization in Rhode Island.

Related Slideshow: INVESTIGATION: Fox, Corso and 38 Studios

The Early Years

Early 2000s

Fox was emerging as a powerful leader in the House via his role on the Finance Committee and later as Finance Committee Chair. Corso served on the management team at developer's Buff Chace's Cornish Associates.

The two worked together to write and pass the Historic Tax Credit Legislation.

Insiders

Insiders Had Hands All Over Schilling’s 38 Studios Deal

The owner of the construction company that was awarded a contract to work on the interior of 38 Studios’ downtown headquarters has close ties to House leadership and other prominent local politicians, GoLocalProv has learned.

Steven Nappa, who owns Nappa Construction Management, has contributed over $16,000 over the last decade to top politicians including House Speaker Gordon Fox, Congressman and former Providence Mayor David Cicilline, Providence Mayor Angel Taveras, former House Speaker William Murphy and former House Finance chairman Steven Costantino. In June 2011, Nappa also contributed $1,000 to the Fund for Democratic Priorities, a political action committee maintained by House leadership.

Nappa is also connected with Michael Corso, a Providence lawyer who has made a fortune helping to sell state tax credits and was involved in the earliest meetings between Schilling and Rhode Island officials. The two hosted a private fundraiser at the Peerless Lofts for then-Majority Leader Fox in 2007. Nappa also helped build the movie screen located in the open space next to Tazza, the downtown café owned by Corso.

Corso himself has contributed $11,625 to Fox, Cicilline, Taveras, Murphy and other local politicians in recent years.

Movie Tax Credits

Corso and Movie Tax Credits

The Providence lawyer who pledged more than $14 million in Rhode Island motion picture tax credits that had not actually been issued as collateral in order to obtain an $8.5 million loan for Curt Schilling’s 38 Studios is now playing a behind-the-scenes role in a Michael Corrente movie that is slated to receive $625,000 in state tax credits, GoLocalProv has learned.

Michael Corso, a top tax credit broker whose loan agreement with BankRI is among several 38 Studios-related matters currently being investigated by state and federal authorities, is one of seven producers for “Backmask,” a horror film currently being shot in Exeter, according to IMDB. Corso’s business partner, Anthony Gudas, is listed as the executive producer and former State Rep. John Loughlin has a small role in the film.

On Monday, the Rhode Island Film and TV Office confirmed the film has received an “Initial Certification Letter” for the tax credits. Corso did not respond to a request for comment.

Tazza Fundraiser

Questions Surround Speaker Fox’s Relationship with 38 Studios Insider

Several weeks after initial inquiries from GoLocalProv, House Speaker Gordon Fox still isn’t answering questions about a 2007 fundraiser held for him by the lawyer who would play a pivotal role in bringing Curt Schilling’s 38 Studios to Rhode Island three years later.

In March 2007, Michael Corso, Steven Nappa and Robert Britto of Nappa Building Corp. and former State Representative Ray Rickman were listed as the hosts of a private fundraiser held in the Peerless Lofts for the then-Majority Leader. The event, which helped Fox rake in approximately $10,000, was catered by Tazza, the downtown café owned by Corso.

But while Fox’s campaign finance reports from the time include details about several other fundraising events held during the first quarter of 2007, there is no information listed about expenses incurred for the Corso-hosted event, which may constitute a campaign finance violation.

“Speaker Fox has been extremely busy entering the final two weeks of the session, but he will soon be checking the campaign records from five years ago,” Fox spokesman Larry Berman told GoLocalProv on June 4. “If corrections are necessary to the report, he will make them.”

Fox and Corso

38 Studios Insiders Have Been Connected Since May 2009

The lawyer at the center of the deal that brought Curt Schilling’s 38 Studios to Rhode Island had a business relationship with a top executive at the video game company a year before a piece of legislation that expanded the EDC’s Job Creation Guaranty Program was pushed rapidly through the General Assembly.

On May 29, 2009, Michael Corso, a top tax credit broker whose relationship with House Speaker Gordon Fox helped steer 38 Studios to the Ocean State, struck a deal to purchase credits handed out for the multi-million dollar Stone House hotel project in Little Compton from the Round Pond Management Corporation, whose President was Tom Zaccagnino.

By June of that year, Zaccagnino, who was also the co-managing director at the Wellesley Advisors Corporation in Maynard, MA, had become Vice Chairman and Lead Director of 38 Studios. A month later, Haymarket Capital, an LLC with the same address as the Wellesley Advisors Corporation, was involved with the seven-figure bridge loan a group of Rhode Island investors provided to 38 Studios.

In March of 2010, Zaccagnino and Schilling met with Speaker Fox and former EDC director Keith Stokes in Corso’s downtown law office. By May, the General Assembly had expanded the EDC’s loan guarantee fund from $50 million to $125 million, the exact amount the EDC awarded to 38 Studios later that summer.

Crony's Bar

A former subcontractor for 38 Studios is alleging that his firm was ordered to work on former Speaker of the House Gordon Fox's business colleague Michael Corso's bar as part of their contract - and has produced what he says is documentation to prove it.

Project manager Michael Rossi with SyNet, Inc. has revealed a budget for work which he says shows at $25,000 line item for work to be done at Corso's Tazza Cafe in 2011 -- under a job order for the failed 38 Studios.

Representative Mike Chippendale, Senior Deputy Minority Leader and Secretary of House Oversight who is leading the investigation into 38 Studios along with Rep. Karen MacBeth, told GoLocal, "[Rossi] has hit a number of things on the head, things he wouldn't have been able to have known otherwise. He was able to validate some things, and the State Police has said they have determined the [budget] document has credibility."

"We're moving in the right direction," said Chipendale, who along with Macbeth have both been the target of mail threats in the past month. "We've kicked the hornets' nest."

Rossi said when he was working at SyNet, he was aware the 38 Studios work could be a possibility. "When my boss called me to say we got the project, that I was going to oversee the [network infrastructure] work, I thought, "Wow...38 Studios. This is big."

"As soon as I started working, they told me to order cable right away," continued Rossi. "I didn't have a permit. Arguments went back and forth. I walk out, I say I don't have a budget, I'm not doing it. I get berated by my boss to get back on the job. Next day, I get the budget, I'm back on the site -- and there are walls up already, with no permits pulled."

A portion of the SyNet 38 Studios budget document with a line item for work on Corso's Tazza bar and restaurant.